Foreigner Friendly Banking in Japan

I love living in Japan, and I love working here. Of course with work comes the opportunity to get paid. Gone are the halcyon days of collecting your pay packet at the end of the week. Instead of a weekly little brown envelope stuffed with cash, we instead have to eagerly await a monthly bank transfer. First world problems, is I think the commonly used internet parlance for such dilemmas.

However, if there’s one thing I have found utterly infuriating during my many years here in Japan, it is the layer upon layer of seemingly pointless bureaucracy that can turn the simplest of administrative tasks into a full-blown international incident. Of course I am hyperbolizing here, but you get the picture.

No more so was this brought home to me than when I tried to open a bank account in Japan for the first time. I went into the bank, with my ID card, my passport and a couple of letters as proof of my address. This is all that was ever required to open an account back in Scotland so surely it would be the same here I thought.

How wrong I was.

First of all, I needed to have a phone number on which I could be contacted. Good luck trying to get a mobile phone in Japan if you don’t have a bank account!

Then I was told that my signature was not valid. Instead I would have to use a “Hanko”.

A hanko is a stamp, similar in appearance to the kind of thing your math teacher used to use to put a smiley face on your completed homework. However in Japan it is an indispensable tool, used for everything from signing in at work, to buying a house.

Getting one made up doesn’t usually take long, there are shops that make them all over Japan, but you should be prepared to wait a day or two to have it made up, especially if your name is long, or difficult to pronounce in Japanese. You will also need to know how to write your surname in Japanese Katakana phonetics, so you can tell the stamp maker what to write on your hanko.

Thankfully, things are far more streamlined and efficient now than they were back in 2006. Japan’s banking sector has, it seems, finally been dragged kicking and screaming into the 21st century. Hanko stamps are no longer obligatory at some banks, and a signature would be acceptable. However, if you are planning on living and working in Japan long term then you will still need a hanko for various other daily activities.

When you go to the bank to open an account, if possible it’s probably best to take a Japanese speaking friend with you. Some of the paperwork can be really complicated. Also, it’s a sad fact that despite the fact that many banks now have websites, guidelines and ATMs in English, finding branch staff who can speak English is still very rare.

Once you have your account up and running you will find that you seldom actually need to visit the bank again. Any direct debits you set up can be done without visiting the bank itself, and most ATM cards will work in convenience store ATMs. However, there are some limitations on what you can do as a foreigner in Japan.

Credit cards may be the norm in most western countries, but, although uptake in Japan is increasing every year, Japan remains a largely cash-based society. To that end, the criteria for getting approval for a credit card is perhaps a bit more stringent than you may be used to and getting rejected is a lot easier than you would wish it to be.

And sadly there are still some companies who, though they won’t admit it of course, seem to just outright reject the idea of accepting foreigners for their credit cards.

Getting loans is also extremely difficult. Whilst you may, on paper, meet all of the bank’s criteria, it is still at the individual institution’s discretion if they approve you for a card or not. The more cynical amongst my foreign friends in Japan often joke that simply having a name written in katakana (Japanese phonetic script used to write non-Japanese names) is enough to get your loan application rejected by most Japanese banks.

Of course this isn’t true. But there are certain steps you can take to make getting approved for a mortgage or other loan in Japan easier.

Firstly, if you can, apply for permanent residency. This shows the bank that you have a commitment to living in Japan and as such are far less likely to tuck tail and run back to your country of origin, leaving an unpaid debt in your wake.

Also, if you have a partner who is Japanese, getting married also opens up many doors. Having a Japanese spouse makes many administrative procedures, not just bank loans, far more accessible and easy to navigate in Japan.

Many of my friends who are married in Japan often tend to just do all banking activities in their Japanese partners name. From a logistical point of view this does make things easier, but also it really depends on each individual couple’s notions of trust and financial independence.

So, how about the day to day stuff?

Well for simple banking, such as receiving your wages and paying the various bills, I recommend Shinsei Bank. Shinsei was the first bank in Japan to introduce online banking in English. Additionally, they don’t require a hanko for signing up for an account. All you need is your ID card, a registered address in Japan and a phone number.

Most convenient of all, your Shinsei ATM card can be used in any 7-11 convenience store ATM in Japan. Recently, the service was also expanded to include Lawson and Family Mart convenience stores as well. Talking about Tokyo, the experience is on the contrary. All or most of the convenience stores have an ATM machine with a visible list of ATM cards that can be used for transactions. Though this service comes with a small charge depending on what day it is and what time of the day it is. Also one can find both English and Japanese options for making transactions.

Other banks are starting to catch on, and are also beginning to offer English services, however, Shinsei also has the added bonus of dedicated English-speaking customer support for when you have a problem. Again they are somewhat ahead of the curve here, as many other Japanese companies tend to outsource this job to Philippines based translators rather than actually hiring retained Japanese, English speaking staff.

So overall, I would recommend Shinsei for those new to Japan. Other banks may offer better rates and perhaps more efficient services, but the services that Shinsei do offer are all available in English, and when it comes to all financial matters, I find that very reassuring.

P.S: The author is currently residing in Osaka, so most of the information speaks of his personal experiences of banking there.